Mayor Clarin wants ordinance to borrow modified, not to include buy-out provision

April 14-20, 2011

Nabunturan Mayor Romeo Clarin is reportedly sending back the approved ordinance authorizing him to borrow P82 million with a P1.8-million buy-out scheme of paying the P90-million municipal bond flotation consultant, Preferred Ventures Corporation.
Councilor Carlo Ancla confirmed the report saying that the mayor did not sign to approve the ordinance and returned the ordinance to the Sangguniang Bayan that had already approved it in second and final readings last week.
Ancla said that under the SB’s rules of procedures the modification sought by the mayor could be done.
Clarin’s return of the measure is not a veto but a mere return seeking for final modification, he said.
Ancla, finance committee chairman and author of the ordinance, said he agreed with the mayor’s move.
Said ordinance had a provision of paying Preferred Ventures Corp with P1.8 million obviously for the company to exit from bond flotation which the Clarin administration is junking now with the direct bank borrowing measure.
Ancla said that in the coming modified ordinance the amount of loan would be further reduced from P82 million to P80 million.
Earlier, remaining oppositors to the P90-million bond flotation slammed the municipal buy-out plan of paying P1.8 million to Preferred Ventures Corporation, the municipal bond float consultant, as “disadvantageous and prejudicial to the government.”
They said that administration of Clarin “might again be entangled with a new legal case… if they would pay P1.8 million to Preferred Ventures in their planned buy-out scheme.”
“In the first place, Preferred Ventures should only be paid in no cure, no pay basis, that is if there would be proceeds from bonds floated, but there’s no bond proceed yet ,” said Emilio “Meloy” Delos Reyes , one of the lead oppositors to the bond float.
The bond flotation started by the past administration of former Mayor Macario Humol obviously failed in raising funds to finance the construction of the two-storey “mall-type” public market building as there was reportedly no buyers in the public auction of bonds to the general public and the bond float’s second-stage underwriting phase, which entails more obligations, is snagged by the reported denial of the Veterans Bank Manila to release funds to buy the bonds in bulk due to existing injunction issued in November 2010 by the Regional Trial Court Branch 3 in Nabunturan temporarily stopping the municipal bond flotation.
The group of bond float oppositors composed of taxpayers and market vendors filed an injunction case in November 2008 in their legal bid of stopping the bond flotation after the previous Sangguniang Bayan presided then by Clarin turned down their people’s initiative petition in their bid to put the issue for a local referendum.
The oppositors cited that the bond flotation is disadvantageous to the municipal government owing to its many un-understood and unknown obligations and conditionalities besides that the rentals to spaces in the proposed public market building were exorbitant as earlier tagged by a group of complaining market vendors.
The buy-out scheme appears to be paying Preferred Ventures in exchange that it would already exit as the municipal consultant from the terminated bond flotation.
The returned ordinance authorizes Mayor Clarin to contract a bank loan worth P82 million “to finance the planning, design, construction and development of the public market (building) and to buy-out the agreement with the bond flotation financial advisor.”
Rationale d) in the the proposed ordinance states: “Consonant to the shifting of form of borrowing, the agreement with the financial advisor must be terminated, thus the buy-out provision of the Memorandum of Agreement must be complied with.”
In its earlier draft, it was first an ordinance repealing the bond flotation ordinance and authorizing the mayor to sign,contract and negotiate an P82-million loan. It was approved in first reading. But in the SB’s next sessions late March, the body reportedly backpedalled by aborting the ordinance repealing the bond float ordinance and instead pushed the ordinance authorizing the mayor to contract a bank loan with the buy-out provision.
Former Mayor Macario Humol started the bond flotation during his second term starting particularly in 2006. He further pushed it in his third term starting in 2007.
During those terms of Humol, Clarin was the vice mayor actively supporting the much-touted P90-million bond flotation .
As this developed, separate reports said that Clarin and Humol were in sour relationship as the former has obviously decided to junk the latter’s pet project. “The junking is like a slap to Humol,” a municipal employee who requested anonimity said.
The report on the sour relationship betweent the two raised speculations of a possible comeback of Humol for mayoral bid by 2013 against Clarin.
Right after the May election last year, Clarin, who just assumed as the new town mayor, Humol, who was already a plain citizen, and other pro-bond flotation officials formally launched the project for a construction phase in a ground-breaking ceremony, putting up a huge tarpaulin billboard at the site in the market where block tienda stalls were razed to the ground by a fire in 2005.
Humol is working now in the Capitol as one of the governor’s executive assistants.
One contractor named by sources as Jam Dalthan Construction of a certain Engr. Ariel Moreno (not CCJJ construction as earlier reported) had “voluntarily funded” the foundation works for the public market building after winning in the bidding held before the last May election.
Jam Dalthan Construction had already incurred “more than P25 million” for the initial construction and “we don’t know yet who ordered Engr. Moreno to do it and what papers he is holding,” a source said.
The contractor, the source added, was hoping to be repaid first through the bond float and now through the bank borrowing.
Clarin could not be reached for comments at presstime. (Rural Urban News/Cha Monforte)

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